Enablence Technologies Inc.

Enablence Technologies Inc.

December 13, 2010 17:50 ET

Enablence Expands in the Chinese Market With New Component Joint Venture

OTTAWA, CANADA--(Marketwire - Dec. 13, 2010) - Enablence Technologies Inc. ("Enablence" or the "Company") (TSX VENTURE:ENA), a leading supplier of fiber-to-the-home (FTTH) equipment for triple-play residential and business services and optical components and subsystems for access, metro and long-haul markets, is entering into a joint venture with China's SUNSEA Telecommunications Co. Ltd. ("SUNSEA"), a move that will strategically position Enablence's Optical Components and Subsystems Division to capitalize on the vast opportunity presented by the Chinese market for broadband telecommunications equipment.

The joint venture, to be called Sunsea-Enablence Optoelectronics, will be established in Foshan, China, with operations expected to commence July 2011 subject to regulatory approvals in China. Its initial focus will be on producing components based on Enablence's proprietary Planar Lightwave Circuit (PLC) platform in high volumes. Its product lines will further expand into PLC based modules and transceivers.

SUNSEA is a leading developer and manufacturer of physical telecommunications network equipment in the Chinese market. It has also built a significant supply chain that includes global equipment vendors active in a variety of established and emerging markets.

Sunsea-Enablence Optoelectronics will be created with an initial capital investment of $18 million, of which Enablence will contribute $3.5 million in cash and $1 million in equipment, as well as its market-leading expertise in developing and manufacturing optical components based on its PLC technology. Enablence will hold a 49-percent ownership stake in the joint venture (all figures in U.S. dollars).

In the first year of operation (expected to be July 2011 through to June 2012) Enablence and SUNSEA expect the joint venture to generate revenues of approximately $8 million to $10 million. This is expected to rise to approximately $15 million to $20 million in the second year of operation. The partners expect the venture to be profitable and accretive to earnings within the first year.

"The Chinese market is still in the initial stages of a growth curve for broadband access equipment that is staggering," said Wensheng Wang, Chairman & CEO of SUNSEA . "And yet, until now, China's domestic telecommunications companies have had to rely on foreign suppliers for advanced next-generation PLC-based components. We welcome the opportunity to work with Enablence and integrate its innovative optical solutions into our product lines." 

According to the FTTH Council Asia Pacific's Market Vision report released in November 2010, China is poised to catch up with Korea and Japan as a primary growth engine for the region's adoption of FTTx networks for home and business.

"While Enablence already has valued partnerships with leading technology vendors in China, this is our first joint venture in one of Asia-Pacific's fastest growing telecommunications market," said Tim Thorsteinson, CEO of Enablence. "SUNSEA has an established supply chain, not just in China, but with other global vendors targeting other markets, into which they can introduce our PLC-based components. We look forward to a long and profitable relationship."

About SUNSEA Telecommunications Co. Ltd.

SUNSEA Telecommunications Co., Ltd., founded in 2003, is a high-tech enterprise which specializes in R&D, manufacturing and marketing of communication network physical connection equipment. It provides a full range of physical connection solutions and products, such as audio Main Distribution Frames (MDF), Digital Distribution Frames (DDF), Optical Distribution Frames (ODF), generic cabling, communication shelters, power distribution systems and slot management systems. SUNSEA is also researching outdoor communication solutions, including shelters, cabinets and base station accessories. The company is a leading supplier within China's domestic market and also supplies a number of global vendors through 29 overseas sales offices.

About Enablence Technologies Inc.

Enablence Technologies Inc., (TSX VENTURE:ENA) a publicly traded company headquartered in Ottawa, Canada, designs, manufactures and sells optical components, subsystems and systems to a global customer base.

Enablence's Systems Division has an expanding fiber-to-the-premise (FTTP) product portfolio featuring a variety of architectural options. It enables service providers to evolve their access networks from traditional copper-based networks to advanced optical communications access networks that are based on state of the art IP and Ethernet standards, for triple-play voice, video and data services including HDTV, IP Telephony and ultrafast internet access.

Enablence's Optical Components and Subsystems Division is a global leader in applying Planar Lightwave Circuit (PLC) technology to integrate multiple components into a single optical chip to reduce footprint and costs. Network and equipment designers around the world turn to Enablence for a variety of components and subsystems for access, metro and long-haul, including transceivers, splitters, waveguides, optical channel monitors, multiplexers, ROADMs, switches, tunable dispersion compensators, and photodiodes.

Forward Looking Statements

This press release may contain forward looking statements that are made as of the date hereof and are based on current expectations, forecasts and assumptions which involve risks and uncertainties associated with our business and the economic environment in which the business operates. All such statements are made pursuant to the 'safe harbour' provisions of, and are intended to be forward looking statements under, applicable Canadian securities legislation. Any statements contained herein that are statements of historical facts may be deemed to be forward looking statements. By their nature, forward looking statements require us to make assumptions and are subject to inherent risks and uncertainties. We caution our readers of this press release not to place undue reliance on our forward looking statements as a number of factors could cause actual results or conditions to differ materially from current expectations. Please refer to the risks set forth in the Corporation's continuous disclosure documents that can be found on SEDAR www.sedar.com. Enablence does not intend, and disclaims any obligation, except as required by law, to update or revise any forward looking statements whether as a result of new information, future events or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Enablence Technologies Inc.
    Tim Thorsteinson
    Chief Executive Officer